Slovak crown firms, cracks 34.0/euro, outlook cloudy

...strong foreign trade data, but dealers said the 
outlook was cloudy in the short run. 
    The crown climbed as far as 33.930 per euro late in the 
session, before retreating to 33.965 as of 1605 GMT . 
It stood at 34.0 late on Tuesday. 
    "The crown was firming mainly because stocks calmed down in 
the U.S. ... and also our good trade figures had an impact," one 
dealer said. 
    Slovakia's trade balance swung to a surplus of 3.98 billion 
crowns in January for the first time in three years, data showed 
on Wednesday, raising chances for an interest rate cut by the 
central bank (NBS) this month. 
    Market watchers said it was hard to predict the crown's 
near-term moves as a central bank intervention was looming at 
stronger levels despite positive economic data and news of a 
large foreign investment inflows. 
    "The short-term outlook for the crown is a bit cloudy. On 
the one hand, the economy is powering ahead and speculative 
pressure on the currency is mounting," Nordea Markets analyst 
Anders Svendsen said in a note. 
    "On the other hand, the central bank intervened to weaken 
the crown around 33.800 and is expected to follow up by cutting 
rates later this month. All in all, we are slightly pessimistic 
on the crown over the short to medium term," he said. 
    The NBS, which holds its policy meeting on March 27, has 
been keeping its key repo rate at 4.75 percent for the past five 
months, but debated a 25 basis-point cut at recent meetings. 
    Dealers expected the bank to intervene again in the coming 
days if the crown nears its last week's record high of 33.800 
per euro, with some betting the NBS' action might come sooner, 
at around 33.850. 
    The market will watch the release of February EU-norm 
inflation data on Thursday, which are expected to show a slight 
slowdown in consumer price growth dynamics. 
------------------ MARKET SNAPSHOT AT 1605 GMT ----------------- 
Crown/euro  at 33.965 vs 34.000 on Tuesday (+0.08 pct) 
Crown/dollar  at 25.660 vs 25.766 (+0.41 pct) 
5-yr govt bond  yield 4.410/4.010 vs 4.241/4.020 pct 
7-yr govt bond  yield 4.396/4.196 vs 4.272/4.050 pct 
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